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I see that a lot of banks offer savings account and current account with online banking. Usually the savings account can have instant access and some interest rate, while the current account has no interest rate, but has a debit card.

I use my debit card to purchase things, but I'm always in danger of running out of money on my current account. So I always have to log in to internet banking every few days and put some money from my savings account to my current account. I don't want to put all money on my current account, because then I do not have any interest on my unused money.

It seems utterly trivial that I should be able to keep all of my money on my savings account and transfer money to my current account on a on-demand basis. Yet, I could not find an option to do this. Does anyone have a tip?

What I don't understand is why cannot I earn interest on my money and use it with my debit card at the same time?


I went to my bank today and they told me the only way I can access my instant-access savings account is through manual log-in. They said they had the option of automatic transfer a few years ago, but they removed it. I assume they did this in order to discourage people to access their instant access accounts instantly.

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    Debit card conventions, business practices, and technology vary widely. What country are you referring to? – Chris W. Rea Apr 30 '13 at 13:50
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    Have you considered as a safety issue, if you lost your debit card and someone found it, you only have limited funds at risk. – Victor Apr 30 '13 at 21:12
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    It doesn't directly answer your question, but have you considered using a credit card? When your monthly bill arrives, you can arrange to pay it either (a) directly from your savings account (if the account supports it), or (b) by direct debit from your current account, funded by a manual transfer from your savings account. For (b), many banks allow online transfers to be set up to take place on a specific date in the future, e.g. a couple of working days before the credit card bill is due. – Steve Melnikoff May 1 '13 at 12:46
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You should see what your average weekly purchases are and set that aside in your checking/current account, then you should typically not be in danger of overdrawing. Doing this exercise will also help you get a better understaning of your spending and spending habits.

For example if on average you spend $500 USD a week then put say $575 USD in your current account and you should not be in danger of over drawing and then having to go into your online account and make the transfer.

I always tell people to setup a budget and to stick to it as best as they can, earmark money for dining out, entertainment, anything they can think of that they would spend money on, this way they can keep track of where it goes and how often and quick it goes.

  • that's true, but then you don't earn any interest on $500. (on average $250). Plus you have to log in every week to make the transfer which is a nuisance – siamii Apr 30 '13 at 15:35
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    You don't necessarily have to log in. My bank in the US (Chase) allows me to set up recurring transfers between accounts, ie move $X a month from account A to account B. Also, you can pay for "overdraft protection" such that when your checking balance falls below zero, instead of being penalized a balance transfer of $X is automatically executed with funds from another account or credit card. You may have to pay a fee for this (it's free if you have tons of money in your account). – JAGAnalyst Apr 30 '13 at 21:38
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    +1 for this answer. The reason banks offer you more in your savings account and have other stipulations is that they are incentivizing you to keep the money in your account long-term, so they can meet their capital requirements and make money by lending it out to someone else. The difference in interest earned is often trivial anyway. – JAGAnalyst Apr 30 '13 at 21:39
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In Canada, when doing a debit transaction there can be the option to select which account the transaction is to be performed that would be where you'd have the choice to select a savings account.

Some banks may offer interest on a chequing account if certain conditions are met. I remember seeing once that there was a minimum balance of $1,000 at all times and a few other things that may make it less than worthwhile for the low rate offered.

Another possibility is to see if your bank will automatically transfer funds from savings to main if needed. I've had this happen a few times where money would be transferred in so I could have a purchase or cheque go through.

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The type of savings account your are referring to is an "Instant Access" account which offers little or no interest in savings. To solve your problem I would suggest opening a higher interest Current Account, there are several on the market which offer equivalent rates of interest as an Instant Access account but still allow access via a debit card. Usually there are requirements for a regular salary transfer into the account or a minimum balance to qualify for interest.

Banks that are well know for offering high interest Current Accounts include Nationwide, Santander, TSB and most of the build societies.

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The danger of overdrawing the account via the use of a debit card, and the exorbitant fees that can result make me hesitant to use a debit card. The ability to cover all the transactions with one payment is why I use a credit card for these "debit" transactions.

Yes there is a risk of a late payment, but that can be easily avoided within the three week grace period. The ability to electronically transfer the money to pay off the card makes this even easier.

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